Dexia, through its subsidiary Dexia Bank Belgium, Dublin Branch has successfully closed a partially funded balance-sheet CDO transaction on a USD 3 bn portfolio of Asset Backed Securities (ABS). Dexia mandated Dexia Capital Markets and ABN Amro to arrange the transaction.
The securitised portfolio consists of 127 different ABS, all rated AAA by one or more rating agencies. The portfolio is diversified among a number of ABS asset classes including: student loans, RMBS and CMBS.
Dexia is selling the credit risk related to the AAA ABS portfolio to external parties by means of two credit default swaps: a non-funded super senior credit default swap with an undisclosed party and a junior credit default swap with Dublin Oak Ltd, a special purpose company registered in Ireland. Dublin Oak has issued 3 tranches to transfer the credit risk to the market. The ABS portfolio will remain on Dexia Bank Belgium, Dublin Branch balance-sheet and will continue to be managed by the experienced ABS portfolio management team based in Dublin, which is part of Dexia's Credit Spread Portfolio (CSP)team. The transaction will be replenishable until 2010.
Benefits for Dexia
As a result of this transaction, the amount of regulatory capital attached to this ABS portfolio has been significantly reduced and will be redeployed to generate additional business, leveraging off the experience of Dexia's Portfolio Management(CSP)team. "
Dexia, a European banking group, world leader in Public & Project Finance
The Dexia Group (www.dexia.com) was born in 1996 from the alliance of two major players in local public finance in Europe: Crédit local de France and Crédit Communal de Belgique. With a market capitalisation of 26.0 billion euros at 31 March 2007, Dexia ranks among the twenty largest financial institutions in the eurozone. It currently employs some 33,000 staff and has operations in about thirty countries. Dexia enjoys one of the best credit ratings in the banking sector. Dexia’s development strategy is based on the Group’s two pillars: Universal Banking in Europe (Belgium, Luxembourg, Slovakia and Turkey), and Public/Project Finance worldwide.
Dexia Bank Belgium, Dublin Branch: Eamonn Tuohy: + 353.1.645.50.11
Dexia Credit Spread Portfolio: Fergal McGrath: + 353.1.670.27.05
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